Colombia’s big green plans run into headwinds

Tricky politics have hampered renewable growth and plans to stop oil and gas exploration have sparked economic fears

Colombia’s ambitious green plans have hit headwinds, as tricky politics hampers renewable growth and plans to stop oil and gas exploration spark economic fears.

Last June, left-winger Gustavo Petro was elected president, vowing to make Colombia a “world power of life” in his four-year term.

He promised to scale up renewables, end fossil fuel exploration and ensure that workers are protected from the transition.

Climate campaigner Andres Gomez from CENSAT said it was an ambitious strategy that “no other country in the world is trying to do”.

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Over half of Colombia’s export revenue is from fossil fuels and richer nations like the US, UK and Canada have yet to commit to stopping fossil fuel exploration.

But Petro’s ambitious strategies are experiencing turbulence. Foreign energy firms have pulled out of renewable projects and plans to restrict fossil fuel exploration have sparked a backlash from some economists.

Beyond oil and gas?

At the start of the year, the then Colombian energy minister Irene Velez told the World Economic Forum in Switzerland that no new oil and gas exploration licenses would be granted.

Since then, none have been. The Colombian Senate passed a motion in April banning fracking for gas and no new coal exploration licenses have been granted either.

But this end to exploration has not been put into law, meaning the next government could issue licenses when it comes into power in 2026. Colombia restricts presidents to one four-year term.

It could happen sooner. In August, Velez was replaced as energy minister by Omar Camacho. He and finance minister Ricardo Bonilla have made overtures towards the oil and gas sector.

In August, Bonilla told a congressional commission that he was not ruling out future licensing but would first look at how much could be produced within areas already licensed for exploration.

Economic fears

Pressure to issue licenses was increased when Colombia’s Hydrocarbons Agency found that existing reserves are slightly smaller than previously estimated – enough for just over seven years.

Milton Montoya, a professor at Universidad Externado, warned that lower production could be economically damaging to Colombia.

“If we don’t invest in exploring right now, we’re going to have to import gas and oil. For our economy that would be a disaster,” he said.

Fuel prices are already a sensitive political subject: In August, taxi drivers in Colombia’s capital city Bogota stopped traffic in a protest against high fuel prices.

Paro de Taxistas en Bogotá

Dizque se siente Decepcionados del Gobierno Petro pic.twitter.com/1XqHvJ4aB1

— Ó (@LawyerOCT) August 9, 2023

Jobs are at risk too. A government analysis this year found that halving the production of coal and oil could risk 362,000 jobs if there are no measures in place to help.

To deal with this upheaval, the energy ministry is consulting on a just transition plan for workers. But Juan Carlos Solano, the environmental lead at Colombia’s coal workers’ union said that the process is “too slow”.

Renewables roll-out

Wind and solar still provide just over 2% of Colombia’s power. The government wants to multiply installed capacity by 20 by 2030.

Its having some success. Last month, the energy regulator announced a record number of renewables developers were requesting to be connected to the electric grid.

But some projects are stalling. French energy giant EDF cancelled a solar project south of Bogota in October.

In a statement, it primarily blamed local government for delays in environmental permits. But also criticised national government’s tax reforms which made the project less profitable.

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The rising cost of borrowing and a volatile exchange rate also dampened their enthusiasm, the company said.

In May, Italian firm Enel indefinitely suspended a wind farm near the Venezuelan border because indigenous Wayuu communities regularly blockaded construction.

But a 200-mile electricity transmission cable through the same region has been agreed, along with an agreement on energy transition.

Romain Ioualalen is the policy manager of Oil Change International. He said “‘it was always going to be the case that a very ambitious, visionary policy was going to be difficult”.

“No one said the transition was going to be easy and perfection doesn’t exist in the policy world,” he added, “but the political capital and energy they’re putting in to make this work is impressive”.

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